Bangladesh Tourism Corporation wants cut in tariff on imported liquor

Bangladesh Parjatan Corporation (BPC), an organisation to promote tourism, wants the National Board of Revenue to cut import tariffs on foreign liquor and alcoholic beverages to cater to ever increasing demand for hard drinks across the country.

BPC thinks because of excessive import duties, VAT and supplementary duties, demand for foreign liquor fell in Bangladesh, an official of BPC said.

Citing statistics, he said import of foreign liquor and alcoholic beverages fell 36 percent to $0.70 million in fiscal 2021-22 from $1.1 million in the earlier fiscal.

He said drinkers are being bound to take locally brewed moonshine which is hazardous and proved fatal often.

fall in the import of alcoholic beverages that make up a significant portion of its income, an official who attended the meeting said.

BPC discussed the matter at a meeting with the National Board of Revenue on September 3 at the Ministry of Civil Aviation and Tourism. Secretary Md Mokammel Hossain presided over the meeting.

Citing exorbitant duties, the official informed the NBR in the meeting that at the consumers’ end, the duty cumulates at 590 percent for liquor and 447 percent for beer.

Moreover, the corporation also needs to pay 15 percent VAT while selling liquor to private bars and clubs. Customers of those bars and clubs also need to pay 15 percent VAT one more time, he told the meeting.

The Tourism Corporation wants to pay the duty, estimating the bulk prices of the imported drinks as NBR demands that duty be paid as per retail prices. As the impasse continues, incoming shipment of liquor--- various spirits, beer and whisky--- has almost stopped.

The meeting decided to formally request the NBR to restructure its import tariff on foreign beer and liquor by calculating the real import prices.

A general manager of the corporation had informed the meeting that they procured a litre of Heineken brand beer from the producer at $1.52. But the customs at Chittagong Port consider the price of the beer at $2.77 by estimating a median value. Currently, there is a 350 percent supplementary duty on imported liquor and 250 percent on imported beer.

The BPC is contemplating asking the NBR to allow the bars owned by the corporation to sell liquor without VAT. Due to high taxation, private bars are buying liquor from unauthorised sources.

The BPC officials said the high price of liquor at its bars is holding back foreigners from consuming liquor from them and they are more interested in having moonshine.

The corporation set up a bar at Rooppur of Pabna to entertain international citizens working for Rooppur Nuclear Power Plant.

The bar has not been a popular destination among foreigners as it serves liquor with a 425 percent duty and 310 percent tariff on beer. In 2019, a Russian engineer died after consuming locally made liquor.

“Many people are drinking liquor collecting from the different unauthorised sources in the grey market. We gave our opinion suggesting a duty cut to mitigate the use of adulterated liquor,” Md Ali Kardir, Chairman, Bangladesh Parjatan Corporation, told Business Insider Bangladesh.

The September 3 meeting also called for pronouncing foreigners working in the nuclear power plant as “privileged persons” and issuing a card so that they can buy liquor at an affordable price.

Some 4,403 foreign citizens, mostly Russian, are working at the Rooppur Nuclear Power Plant project in Pabna.

In the meeting, it was informed that the different bars in Dhaka do not serve foreign liquor. They are selling only local liquor made by state-owned Carew and Company. Carew and Company earned Tk 195 crore in revenue through selling various liquors in FY21. This is the highest earning in Carew’s history.